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FAIR VALUE MEASUREMENTS
 6 Months Ended
Jun. 30, 2026
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS
The Company determines fair value based on assumptions that market participants would use in pricing an asset or a liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels:
•Level 1 inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.
•Level 2 inputs: Other than quoted prices in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.
•Level 3 inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date.
Recurring Fair Value Measurements—The assets and liabilities measured at estimated fair value on a recurring basis and their corresponding placement in the fair value hierarchy are presented in the tables below. The Company evaluates its estimates and judgments on an ongoing basis. The Company bases its
estimates on historical experience and or other relevant assumptions that the Company believes to be reasonable under the circumstances. Actual results may differ materially from management’s estimates.
Fair Value Hierarchy
As of June 30, 2026Level 1Level 2Level 3Total
Assets:
Life settlement policies, at fair value$— $— $383,044,248 $383,044,248 
Total assets held at fair value$— $— $383,044,248 $383,044,248 
Liabilities:
Current portion of long-term debt, at fair value$— $— $38,293,580 $38,293,580 
Total liabilities held at fair value:$— $— $38,293,580 $38,293,580 
Fair Value Hierarchy
As of December 31, 2025Level 1Level 2Level 3Total
Assets:
Life settlement policies, at fair value$— $— $468,857,929 $468,857,929 
Total assets held at fair value$— $— $468,857,929 $468,857,929 
Liabilities:
Current portion of long-term debt, at fair value$— $— $114,424,000 $114,424,000 
Total liabilities held at fair value:$— $— $114,424,000 $114,424,000 
Life Settlement Policies— The Company accounts for owned life settlement policies using the fair value method or investment method (cost, plus premiums paid). The valuation method is chosen upon contract acquisition and is irrevocable.
The Company purchases policies from individuals or institutions, bundles those policies into tranches and sells to institutions, insurance carriers or funds that are attracting new investors. These initial purchases happen in the secondary market and the tertiary market. The secondary market is different from the principal or most advantageous market for purchasing policies and has less competition due to state-by-state licensing requirements. The Company leverages its broad policy base and extensive network, to offer individual policies that provide enhanced standalone value. This is achieved by precisely matching each policy’s risk profile to the specific needs of fund managers, institutions, insurance carriers, or funds as well as bundling secondary market originated policies with those originated in the tertiary market. This tailored approach attracts new investors by making it easier to identify and acquire policies that align with their investment objectives. This approach enhances realized gains because it increases market liquidity, broadens the investor base, and enables more efficient price discovery, which in turn supports higher policy values. Our historical realized gains on policies sold and matured, are materially consistent regardless of where policies are originated.
For policies carried at fair value, the valuation is based on Level 3 inputs that reflect our assumptions about what factors market participants would use in pricing the asset.

Prior to June 30, 2026, fair value was determined using a discounted cash flow (“DCF”) with Monte Carlo simulation to determine the fair value of each policy. The Company’s model uses a discount rate based on observed transaction pricing which is assessed against historical realized gains. The valuation process used significant assumptions, including survival probabilities and mortality assumptions informed by third-party life expectancy reports and a base mortality table (SOA 2015 VBT) adjusted via a mortality rating to match the risk-adjusted life expectancy, and market-calibrated discount rates.


The Monte Carlo simulation is applied to each policy to generate one million mortality scenario simulations which provides a comprehensive distribution of potential outcomes and calculates expected cash flows. In certain circumstances, if there is a verbal commitment to purchase a specific policy as of the balance sheet date, we use that transaction price as the fair value as we believe it is a more precise estimate of exit price than that determined using historical data. Further information about the inputs to the valuation are listed below:
•Risk-Based Discount Rate: Each policy's discount rate is determined based on its proprietary risk score (1-5 scale), with discount rates directly calibrated to observed transaction prices for policies in the same risk score category. Specifically, for each risk score category, the Company calculates the annualized internal rate of return ("IRR") implied by the relationship between modeled future cash flows (based on life expectancies) and the actual sales price observed in a dataset comprising over 1,000 executed policy transactions. These implied IRRs are aggregated on a weighted-average basis by risk score category to establish the discount rates applied in the Company's DCF/Monte Carlo valuation model. The dataset is updated periodically and adjusted for current market conditions based on observed institutional demand and contemporaneous trade activity. This transaction-based approach ensures that discount rates reflect actual transaction pricing rather than theoretical market rates.
•Risk Score: Each policy is assigned a proprietary risk score from 1 to 5, with 5 being higher risk, based on multiple factors including insured age, life expectancy, life expectancy extension ratio, survival probability at breakeven, maturity probability, and risk-adjusted return on capital metrics.
•Life expectancy: Survival curves are generated using the Society of Actuaries 2015 VBT mortality tables adjusted by mortality ratings to achieve risk-adjusted life expectancies. For policies with multiple insureds, joint survival probabilities are calculated using statistical modeling techniques.
Effective with the quarter ended June 30, 2026, fair value is determined using a market multiple approach based on historical market-observed returns on cost basis (the “Historical Return Method”). Prior period amounts have not been adjusted. Under this method, the fair value of each policy is determined by applying a risk-grade-specific weighted-average return percentage (i.e., market multiple) to the policy’s cost, which represents the purchase price plus all premiums paid from acquisition through the measurement date less any cash withdrawals or loans. The market-observed returns for each risk grade are derived from the Company’s transaction database of executed policy sales both to external parties and related party funds, as discussed further below.
The Company adopted the Historical Return Method as a change in valuation technique resulting in a measurement that is equally or more representative of fair value. This change is accounted for prospectively as a change in accounting estimate. The Historical Return Method more directly reflects market participant pricing behavior and reduces model complexity relative to the prior discounted cash flow approach.
Each policy is assigned a proprietary risk score from 1 to 5 (with 5 being higher risk), based on multiple factors including insured age, life expectancy, life expectancy extension ratio, survival probability at breakeven, maturity probability, and risk-adjusted return on capital metrics. The risk score determines the applicable risk-grade-specific weighted-average return percentage applied to policies to derive the estimated fair value.
Life expectancy reflects the probable number of years remaining in the life of a class of people determined statistically, affected by such factors as physical condition and age. Survival curves are generated using the Society of Actuaries 2015 VBT mortality tables adjusted by mortality ratings to achieve risk-adjusted life expectancies. For policies with multiple insureds, joint survival probabilities are calculated using statistical modeling techniques. Life expectancy is a determinant of risk score and therefore indirectly drives the applicable risk-grade-specific weighted-average return percentage. These
inputs inform policy acquisition pricing for each life settlement policy, which establishes the cost basis of the assets, along with premiums paid to date.
The historical return experience is reviewed and calibrated each quarter based on current period sales experience, only if there is significant volume of transactions for the applicable risk grade in that period.
We consider sales to related funds to be transacted at arms’ length terms. The Company does not rely on related-party transactions in isolation. For related-party policy sales, the Company evaluates whether the transaction was executed at market terms using multiple corroborating indicators:
•Independent market checks where available, including unaffiliated third-party bids or indications of interest and third-party investor interest in the same or similar policies;
•Comparisons to contemporaneous third-party executed sales for policies with comparable characteristics, including Risk Score, life expectancy band, face value range, and other key policy attributes; and
•Parity of key non-price terms and customary execution and approval processes, including confirmation that the approval workflow applied to related-party transactions is consistent with that applied to arm’s-length transactions.
Additionally, for all sales, both to external parties and related party funds, the Company performs a quarterly lookback (e.g., retrospective) analysis to compare fair values against actual sales experience to validate the Company’s valuation methodology. The Company also obtains an external valuation analysis on a sample of policies held at the end of the quarter and for the entire portfolio of held policies at the end of the year.

In certain circumstances, if there is a commitment to purchase a specific policy as of the balance sheet date, we use that transaction price as the fair value as we believe it is a more precise estimate of the life settlement policy’s exit price.


The following table provides quantitative information about significant unobservable inputs for Level 3 fair value measurements as of June 30, 2026:
Fair ValueValuation TechniqueSignificant Unobservable InputsWeighted AverageRange
Life insurance polices:
$383,044,248 Market multiple
Historical return 1
25.1 %
10.7% —30.2%
Life expectancy (months)40 months
1 month —223 months
Risk score2.23
1 —5
Secured borrowing, at fair value:
$38,293,580 
Discounted cash flow
Discount rate
8.4 %
8.0% — 8.5%
1 The Historical Return increased from 25% for policies held at December 31, 2025 reflecting recent experience.
The following table provides quantitative information about significant unobservable inputs for Level 3 fair value measurements as of December 31, 2025:
Fair ValueValuation TechniqueSignificant Unobservable InputsWeighted AverageRange
Life insurance polices:
$468,857,929 Discounted cash flow with Monte Carlo simulationDiscount rate13 %
13% —15%
Life expectancy (months)45 months
1 month —267 months
Risk score2.16
1 —5

For life settlement policies carried using the investment method, the Company measures these at the cost of the policy plus premiums paid. During the three and six months ended June 30, 2026, the Company sold its remaining life insurance policies accounted for using the investment method. The policies accounted for using the investment method were $918,305 at December 31, 2025.
Historical Return Sensitivity—The fair value of life settlement policies is sensitive to changes in key unobservable inputs used to estimate the fair value of policies held by the Company. The historical return represents the actual sales price of policies less their corresponding total cost basis divided by their total cost basis. The sensitivity analysis is intended to illustrate the potential increase or decrease if policies sold for an average of 1% above or below their determined fair value. The fair value of the Company’s policies would increase when historical realized gains on life insurance policies sold increases. If the historical realized gains increased or decreased by one percentage point and the other assumptions used to estimate fair value remained the same, the change in estimated fair value as of June 30, 2026, would be as follows:
Fair ValueChange in
Fair Value
+1%$386,010,608 $2,966,360 
No change383,044,248 — 
-1%$380,077,888 $(2,966,360)
Credit Exposure to Insurance Companies—The following table provides information about the life insurance issuer concentrations that exceed 10% of total face value or 10% of total fair value of the Company’s life insurance policies as of June 30, 2026:
CarrierPercentage of
Face Value		Percentage of
Fair Value
Carrier
Rating1
Transamerica15.6%20.8%A
1 Carrier ratings are based on AM Best ratings.
The following table provides a rollforward of the fair value of life insurance policies for the three and six months ended June 30, 2026 and June 30, 2025:
Three Months Ended June 30,Six Months Ended June 30,
2026202520262025
Balance, beginning of period$392,770,863 $446,207,963 $468,857,929 $370,398,447 
Policies purchased1
181,010,442 99,674,578 337,749,491 205,307,659 
Sold/matured policies2
(183,983,451)(150,591,831)(381,604,280)(207,427,913)
Three Months Ended June 30,Six Months Ended June 30,
2026202520262025
Unrealized (loss) gain on held policies, net of the reversal of prior quarter unrealized gain on policies sold or matured(6,753,606)(9,146,012)(41,958,892)17,866,505 
Balance, end of period$383,044,248 $386,144,698 $383,044,248 $386,144,698 
1 Policies purchased represents life insurance policies purchased during the period.
2 Matured/sold policies represents life insurance policies held at the beginning of the period and those purchased during the period that also matured or were sold within the period.
The following table provides a reconciliation of revenue from life insurance policies held using the fair value method for the three and six months ended June 30, 2026 and June 30, 2025:

Three Months Ended June 30,Six Months Ended June 30,
Gains or losses recognized in life solutions revenue in the consolidated statements of operations and comprehensive income:
2026202520262025
Realized gain on sold/matured policies$76,700,160 $63,712,680 $169,594,872 $78,843,443 
Premiums paid(8,370,581)(8,780,431)(18,047,329)(17,088,504)
Unrealized (loss) gain on held policies, net of the reversal of prior quarter unrealized gain on policies sold or matured(6,753,606)(9,146,012)(41,958,892)17,866,505 
Change in estimated fair value (Revenue from life insurance policies held using the fair value method)$61,575,973 $45,786,237 $109,588,651 $79,621,444 


Long-Term Debt—See Note 14, Long-Term Debt for additional information on the secured borrowing. The Company has elected the fair value option in accounting for the long-term debt. Fair value is determined using Level 3 inputs.
Available-for-Sale Investment—The convertible promissory notes are classified as an available-for-sale securities. Available-for-sale investments are subsequently measured at fair value. Unrealized holding gains and losses are excluded from earnings and reported in other comprehensive income until realized. The Company determines fair value of its available-for-sale investments using unobservable inputs by considering the initial investment value, next round financing, and the likelihood of conversion or settlement based on the contractual terms in the agreement. As of June 30, 2026 and December 31, 2025, the Company evaluated the fair value of its Convertible Promissory Notes and determined that the fair value approximates the carrying value of $3,186,955 and $3,108,750, respectively. Refer to Note 8, Available-For-Sale Securities, at Fair Value for additional information.

Non-Recurring Fair Value Measurements
Other Investments— These investments are recorded at cost under the ASC 321 measurement alternative and are adjusted for impairment and observable price changes. Impairment is assessed qualitatively. As of June 30, 2026, and December 31, 2025, the Company determined that the carrying
value of $73,043,493 and $18,253,585, respectively, approximates fair value. Refer to Note 9, Other Investments and Other Assets for additional information.
Financial Instruments Where Carrying Value Approximates Fair Value—The carrying value of cash and cash equivalents, accounts receivables, accounts receivable, related party, income tax receivables, accrued expenses, and other current liabilities approximates fair value due to the short-term nature of their maturities.